The Biggest Loser From Cantor's Stunning Collapse: Boeing

While Eric Cantor may have been nothing but a Wall Street pawn, eager to appease whoever the highest lobbying bidder du jour was, the biggest loser from his dramatic fall from grace at the hand of the tea party is not a Wall Street company at all, but Boeing. The reason, as Bloomberg explains is that Cantor's defeat threatens congressional reauthorization of low-cost lending that benefits the world’s largest planemaker.

The name of the entity whose fate is at stake: the US Export-Import, or Ex-Im bank. From Ex-Im's description:

It was established in 1934 by an executive order, and made an independent agency in the Executive branch by Congress in 1945, for the purposes of financing and insuring foreign purchases of United States goods for customers unable or unwilling to accept credit risk. The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to international buyers. The Bank is chartered as a government corporation by the Congress of the United States; it was last chartered for a three-year term in 2012 which will expire in September 2014.

Said otherwise, Ex-Im arranges financing that helps foreign airlines buy jets, a service that Boeing said last month would support $10 billion of 2014 sales. As Congress debates reauthorization, House Financial Services Committee Chairman Jeb Hensarling of Texas is being promoted as a possible Cantor successor. He has said the U.S. should “exit the Ex-Im."

Of course, why a world flooded with $10 trillion in excess liquidity would need yet another taxpayer-funded subsidy for corporate profits is not exactly clear. Which is why Boeing's order book suddenly seems at risk now that big-business advocate Cantor is gone:

Cantor has been an Ex-Im advocate, and his upset brings the bank’s “future into question,” two Bloomberg Industries analysts, Caitlin Webber and George Ferguson, said in a note today. “If the bank isn’t renewed by Sept. 30, the agency can’t finance new deals, though it could service existing commitments, estimated at $114 billion.”

The majority leader was upended by a Tea Party-backed challenger, David Brat, a move that may embolden more-conservative Republicans to buck party leaders. Washington-based Krueger said the bank has now been thrust into a “conservative uproar” over what critics decry as “corporate welfare.”

Keeping alive the Export-Import Bank will be an “even more high-profile/challenging fight,” Chris Krueger, a senior policy analyst for Guggenheim Securities LLC, said today by e-mail. Boeing was the “biggest loser” besides Cantor in the Virginia Republican’s surprise loss yesterday, Krueger wrote.

Perhaps, just perhaps, with the victory of David Brat, the crony "politics as usual" play, in which US taxpayers relentlessly subsidize big global corporations, is finally coming to an end. Or at least one can dream.

One of the ways durable goods numbers are goosed is with Boeing reporting 'list prices' for aircraft sold. Of course no airline pays list price and the bigger the order, the larger the discount. Want 200 737 jets? You can get a 35% or more discount off 'list price'. Order just two planes and you can still get a 10% discount minimum.

And do not believe for one moment that the voters understand what they truly did. On one blog a gal mentioned she voted for him because his last name is Brat and she was a military brat. I tend to agree that Brat was right...it was a miracle.

Agreed. I was reading a few liberal blogs last night and I couldn't help but laugh to myself when the topic was about Shrillary Clit running in 2016. The comments went something like this "Yes madam president please run, you are the only one who can save us". We have a nation full of fucking idiots.

Won't matter. Even if every incumbent gets run out of town, it creates the perfect opportunity for TPTB to remove all of the can-kicking supports, letting the system crash while blaming all the noobs with good intentions.

Very true, we would see the worst come out of many folks. That said, we would see the best from many as well, many that are ready to shit or get off the pot and start from scratch without the corrupt fucks running the show behind the iron curtain.